President Bush urged Congress to protect America's patients,
doctors, and hospitals from the staggering costs of out-of-control
lawsuits by passing important medical liability reforms this year.

The President proposed important steps to make health care more
affordable and accessible for all Americans by making the medical
liability system more stable and predictable, and by increasing patient
safety by reducing the disincentives for reporting medical errors and
complications.

A Framework for Addressing the Medical Liability Crisis

President Bush has proposed a framework for addressing the medical
liability crisis.

National adoption of proven standards to make the medical
liability system more fair, predictable, and timely. Experience in
many states has demonstrated that these standards can reduce Federal
government costs by at least $28 billion per year or more, freeing up
needed funds for making health care more affordable. These standards
can reduce health care costs for all Americans by $60 billion or more,
and improve access to quality health care as well. The President
proposes that Congress take action to:

Secure the ability of
injured patients to get quick, unlimited compensation for their
"economic losses," including the loss of ability to provide unpaid
services like care for children or parents.

Ensure that
recoveries for non-economic damages do not exceed a reasonable amount
($250,000).

Reserve punitive damages for cases where they are
justified, and limit punitive damages to reasonable amounts.

Provide for payments of judgments over time rather than in a single
lump sum, to ensure that appropriate payments are there when patients
need them.

Ensure that old cases cannot be brought years after
an event.

Reduce the amount that doctors must pay if a plaintiff
has received other payments from an insurer to compensate for their
losses.

Provide that defendants pay judgments in proportion to
their fault.

Improvements in health care quality and patient safety through
litigation reform. Patients deserve high-quality health care without
avoidable medical errors and complications, and the Administration is
supporting many efforts to achieve this goal, through better
information and other steps to improve quality. One proven approach to
reducing errors and complications is patient safety and quality
improvement programs implemented by doctors and health care
organizations working together. By sharing information on quality
problems and medical errors, health professionals can determine ways to
avoid errors and complications in the first place. But these efforts
are blocked by fear of litigation. Good-faith efforts to improve
quality and safety are targets for lawsuits based on the new
information. The President has called for legislation to make it
possible for health professionals to work together more effectively to
provide the best possible care for all patients.

Background on Today's Presidential Action

Americans spend more per person on the costs of litigation than any
other country in the world. Unlimited and unpredictable liability
awards raise the costs of health care for all Americans through higher
premiums for health insurance.

Over the last few years, doctors, nurses, and hospitals have faced
skyrocketing medical liability insurance premiums because of our broken
litigation system. Health care providers in states without reasonable
limits on non-economic damages have experienced the largest increases,
between 36% and 113% in 2002 alone. These greatly increased costs are
threatening access to health care. And, the environment has caused
doctors who fear getting sued to practice "defensive medicine,"
prescribing costly medical treatments for the sole purpose of avoiding
litigation, raising costs and putting patients at risk.

Many communities across the country are losing access to medical
care as doctors leave their practices and move to states that have
enacted medical liability reforms and caps on non-economic damages.

The President spoke today from Scranton, Pennsylvania, where three
of five vascular surgeons in the area have left; orthopedic
surgeons have stopped taking trauma calls; OB/GYNs are refusing to take
new patients or curtailing major surgeries; and hospitals cannot afford
to insure their physicians or lure talented doctors.

In Pennsylvania, some doctors have faced a 40% premium increase in
2002. The situation in other states without litigation reform also
continues to deteriorate. Some specialty doctors in Florida had to pay
increased premiums of 75% last year; in Arkansas they faced a 112%
premium increase.

For some specialty physicians, the cumulative costs of these
annual increases have resulted in premiums they simply cannot
afford -- for example, premiums for OB/GYNs in Pennsylvania have
increased by 125% since 1998. In Ohio, OB/GYNs have paid increases of
145% over this same timeframe.

Doctors are retiring early, reducing their practices to patients
who present less of a risk of litigation, or moving to states that
reformed their medical litigation system.

These costs, due to a broken litigation system, are also borne by
the taxpayer, as the Federal government also pays for health care
delivered directly to members of the armed forces, veterans, and
patients served by the Indian Health Service. These costs are also
borne by the Medicare and Medicaid programs.